Month-end flow, ahead of the US Labor...>

EURO-DOLLAR: Month-end flow, ahead of the US Labor Day weekend, allowed USD to

claw its way higher Thursday, EUR/USD able to ease below $1.1050 to $1.1042

after market brushed aside ECB Knot comments on ECB QE (which had briefly spiked

rate to $1.1093). Recovery effort saw rate find resistance at $1.1059. Asia was

able to extend move to $1.1060 before rate eased to retest Thursday's low. Asian

traders noted decent demand around the $1.1045 level, demand suggested linked to

the $1.1050 strike option expiry for today's NY cut, E1.68bln of EUR puts. Area

between $1.0997-1.1000 holds strikes for another E1.71bln of EUR puts. 

- Citi's month-end model reportedly shows an increase in strength of the EUR/USD

sell signal vs last week's (pre G7 report).

- MNI interview with ECB Lautenschlager 'No need for more QE' similar to ECB

Knot. Flash EZ CPI in focus at 0900GMT.  

- Reaction saw EURUSD push up to $1.1052 where it met sellers that eased rate

back below $1.1050.

- $1.1027 YTD Aug01 low exposed ahead of $1.1000 support. Resistance $1.1060,

$1.1090/1100.